Nationwide the rental prices have fallen for the first time in 6 years due to Covid-19

19-10-2020 — 

Thursday October 15th a survey was published by Pararius, the largest rental platform in the Netherlands. They have charted that national rents have been falling for the first time in 6 years since the start of the Corona crisis. Especially in and around the big cities.

They have calculated that prices in Amsterdam have fallen by 5.9%. This is mainly because there are far fewer expats coming in. And especially in large cities such as Amsterdam, homes that are normally rented out through AirBnB, are now rented out for the long term. So there is less demand and more listings.
However, Pararius bases their calculation on the square meter price, which we believe gives a somewhat distorted picture. Small houses yield relatively more rent than larger houses. Moreover, Pararius has no insight into the actual rent, they can only base themselves on the asking price as advertised on their platform.

Analysis of our own data
We have analysed our own data from the start of the Corona crisis in mid-March to the present and come to slightly different conclusions; in Amsterdam average rents have even fallen by 9% according to our data. We have therefore analysed the prices of homes that we have rented out again from mid-March to the present day and compared those prices to the prices for which the homes were rented out for the last time. That can be a year ago, but also a little longer ago.

Rents in places around Amsterdam, such as Haarlem and Amstelveen, also fall by about the same percentage on average. Zandvoort seems to be the only place in our data to stabilize, although we have only rented out a number of homes there in recent months. So that statement may not be completely objective.

Exception to the price drop; homes with a house sharing permit in Amsterdam
There is one big exception to the falling prices: landlords in Amsterdam who applied for a house sharing permit (to be able to rent out to more than 2 persons) before April 2020, as we recommended at the time to everyone with a home with more than 2 bedrooms, can now ask a higher price than before. Some houses with such permit, mainly in suburbs such as Amsterdam South East, can even yield 20-25% more than equal houses without permit! Many young people simply want to rent a house together. Because in the end that is usually cheaper per person than renting a room and it’s of course also much nicer to live with friends.

Unfortunately, it is currently no longer possible to obtain such a permit. If you now apply for such a permit, you must give each tenant an individual lease for each room. As a result of which you are automatically bound to the points system and you are in fact no longer free to determine the amount of the rent yourself.

The number of rental listings has returned slightly to normal values
Incidentally, the number of rental properties offered on Pararius is currently declining somewhat. Where in the middle of the Corona crisis there were about 40% more listings than normal, this is now again about 20% more. This can have several causes. For example, it could be that several lessors have decided to sell, given the situation on the selling market. It can also be a seasonal influence, because most homes are simply rented out in the spring / summer.

Nevertheless, we continue to rent out. But at slightly lower prices. And now more than usual to Dutch people and expats who have been living here for longer.

And now?
Despite this, there remains a lot of demand for rental properties. We therefore expect that, once the Corona crisis is over, rents will rise again somewhat. We do not know whether that will go back to original values. There is still a lot of demand, but there are also likely to be layoffs at various companies. And if working from home really becomes common, fewer expats will probably come to the Netherlands. Or those who work in the city will then perhaps, as is clearly visible on the selling market, leave the city and rent a larger / cheaper home in the surrounding area. If that happens, it will of course have consequences for the level of the rental prices.

What we also clearly see is that candidate tenants are currently looking closely at the price-quality ratio. After all, tenants again have plenty of choice. Where tenants used to rent that one apartment, with some overdue maintenance or with outdated furniture, nowadays this hardly ever happens. Or for a much lower price. So now it pays even more to ensure that your home is in good condition and that your tenants rent a nice home.